The UK government will launch an investigation into the mis-sale of holiday insurance by travel agents, in a bid to decide whether there is enough evidence to administer some form of regulation.
The Treasury’s investigation into the GBP650 million market will examine whether there is any evidence to indicate a serious widespread problem of travel agents failing to correctly advise customers on the insurance they sell as part of their holiday packages, Reuters has reported.
The Treasury decided to second look at the issue after choosing not to impose regulations after exploring the area in 2003. The decision follows ongoing concerns over the agents selling practices.
The investigation will decide whether policies need to be regulated like those sold by banks and insurers which are regulated by city watchdog the Financial Services Authority (FSA). If imposed there would be a set sales procedure that must be adhered to.
Additionally banks and insurers’ customers can access the Financial Ombudsman Service if they question the manner in which a policy was sold to them, something currently denied to anyone buying insurance through a travel agent.
At present over 20 million people buy travel insurance every year, and many policies for the same trip that offer similar levels of protection can vary in price by more than GBP200, the Scotsman has reported.